Accelerated profit-taking after four weeks of gains on the nation's stock exchanges sent stock indices dipping last week, despite an assist early in the week from foreign investors.

With an explosive trading on Tuesday, setting a one-day record with 14 million shares acquired, foreign investors remained net buyers by an average value of about VND100 billion (US$5 million) per day.

"This fueled profit-taking among local investors," commented HCM City broker Nguyen Thanh Tung, who noted that rumours that some foreign investment funds would step up buys drove local speculative behaviour.

At mid-week, rumours began circulating that the nation's inflation rate for the year would be well within double-digit territory, and share prices began to react even before the official release of the data on Friday, setting the national inflation rate for 2010 at 11.75 per cent.

During the week, international credit rating agecy S&P also downgraded Viet Nam's sovereign foreign currency rating from BB to BB minus, citing ongoing concerns about the security of the nation's banking system and the looming crisis concerning the debts of State-owned shipbuilder Vinashin.

HCM City Securities Co analysts predicted that the market would continue to be gripped with a nagging uncertainty until the results were revealed of negotiations with Credit Suisse to extend Vinashin's deadline for repayment of bonds.

"The sooner we get some daylight on the Vinashin restructuring, the better," they added.

On the HCM City Stock Exchange, the VN-Index ended the week on Friday at 472.76 points, 2.58 per cent lower than the previous week's close.

The average daily value of trades reached just VND1.4 trillion ($66.7 million), with an average volume of nearly 60 million shares per day.

Banking and financial stocks, as well as real estate shares, saw sharp corrections. Banking stocks declined by over 6 per cent last week, securities stocks by nearly 5 per cent and property stocks by over 4.6 per cent, according to calcuations by Tai Viet Securities Co.

On the Ha Noi Stock Exchange, the HNX-Index lost 7.11 per cent over the course of five declining sessions to close the week at just 111.19 points. The volume of trades declined by 41 per cent from the previous week to 41.6 million shares, with an average daily value of VND800.8 billion ($38 million).

"Over the next few days, we will drift until we hit support, and, as ever, we remind you that the market turns very quickly," wrote HCM City Securities Co analysts, while FPT Securities Co analyst Nguyen Van Quy predicted a market upturn this week as foreign investors began to return from the Christmas holidays.

"Trading might be gloomy and the correction might continue," Quy added, however, predicting a VN-Index next Friday still within a range of 460-490 points.

Tung said markets could rally today, with Friday beginning to signal an increase in buy orders – but if volume remained low today, investors should hold off buying for a few more days